Paying the minimum monthly payment


Problem: An individual has charged $13,573 on his or her credit card at an annual interest rate of 19.9% compounded monthly. Explain to him or her the difficulties that he or she can foresee in future years of interest getting out of control. Give 5-year and 10-year debt projections based on the individual paying the minimum $200 monthly payment.

Prepare the calculations of the problem in an Excel spreadsheet. Make any comments within your spreadsheet on the difficulties encountered.

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Finance Basics: Paying the minimum monthly payment
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